Carrington seeks to attract brokers with new technologies

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California-based non-bank lender Carrington Mortgage Services has invested to drive growth in its wholesale channel, with the latest announcements including new loan processing technology and plans to increase the sales team.

The focus on brokers comes at a time in the mortgage industry where the retail channel is losing origination volume, particularly refinance volume, due to higher rates.

“We put a lot of effort and energy into developing a program to help brokers grow. And we hope that with this program, we can attract more brokers to work with us,” Jeff Gillis, executive vice president of operations, strategy and governance at CMS, told HousingWire.

CMS focuses on government – Federal Housing Administration, Department of Veterans Affairsand United States Department of Agriculture – and non-qualifying mortgage loans (non-QM). In February, the company announced a technology called ProcessIQ to help brokers more easily process those complicated and time-sensitive loans in their pipelines.

The ProcessIQ team handles the logistics and works directly with the borrower, but brokers handle all licensed activities. CMS said the technology costs $200, plus subscription fees, which are $699 in most states for government loans and $750 for non-QMs. According to Gillis, third-party processors charge $1,000 for the same service. The technology is only available for full, non-QM government loans.

“Many brokers don’t have the staff or processing expertise to devote to government and non-QM loans that require more time. Sometimes they have to turn those loans down, or put them on the back burner, to focus their employees on conforming loans that are a little bit easier and quicker to issue,” Gillis explained.

To support the wholesale channel, the company is also increasing its sales force. CMS has 70 account executives and expects to reach 200 this year. The mortgage lender attracts industry professionals and develops its account managers and loan officers internally, selecting people with no experience in the mortgage industry.

Gillis said the wholesale channel accounts for about 40% of its origination volume, but the company’s goal is to increase share by building long-lasting partnerships with brokers. “If we develop retail and wholesale, it’s win-win. But definitely, I think there’s an opportunity for us to grow our footprint on the wholesale side. I would like to be 50-50% or maybe even 60-40%.”

According to Inside Mortgage Financing, CMS is the 24th largest mortgage servicer in the country. In 2021, the company’s services portfolio grew 6.8% year-over-year to $68 billion. The original data is not available.

The company targets underserved borrowers, such as those with lower credit scores, higher debt ratios, or who are self-employed. Gillis believes these borrowers were left behind during the refi boom, but will attract the attention of brokers and other lenders in today’s competitive environment. “We expect to see some lenders jump into our space a bit,” he said.

Gillis said he expects the non-QM market to double in 2021, to $50 billion in origination volume.

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